FirstGroup (LSE:FGP) has agreed to sell Mistral Data Services, part of its First Rail division, to AIM-listed Tracsis for an enterprise value of £48 million on a cash-free, debt-free basis.
The consideration will be paid in cash on completion, subject to customary adjustments.
Mistral Data builds software that integrates passenger and operational data for train operating companies, drawing on customer-facing apps and real-time control centre feeds. Its revenue grew from about £7 million in the 2022 financial year to roughly £13 million in the 2026 financial year, generating operating profit of about £4 million.
FirstGroup expects a profit on disposal of about £46 million, to be treated as an adjusting item.
The sale will cut First Rail's adjusted operating profit for the 2027 financial year by about £4 million and trim group adjusted earnings per share by roughly 0.6p, against 20.3p reported in the 2026 financial year.
Anticipated cashflows of about £6 million from Mistral Data were already included within the group's guided £90 million cash inflow from Department for Transport train operating companies and related rail services; the disposal accelerates that inflow.
FirstGroup now expects free cash generation of about £435 million over the next three years, feeding into its capital allocation policy alongside UK growth investment and shareholder returns.
"The sale proceeds will further strengthen our balance sheet, supporting continued growth in attractive UK bus and rail markets and meaningful returns to our shareholders," said chief executive Graham Sutherland.
Completion is conditional on Competition and Markets Authority clearance and is expected no later than 31 October.
News Intelligence what this means for the company
FirstGroup is selling Mistral Data Services, a rail software subsidiary generating £13m revenue and £4m operating profit, to Tracsis for £48m cash—booking a £46m profit on disposal that will strengthen the balance sheet. The sale accelerates cash inflow by front-loading £6m of anticipated cashflows and reduces FY2027 adjusted EPS by only 0.6p against a 2026 base of 20.3p, a material but manageable headwind that FirstGroup is offsetting by raising three-year free cash generation guidance to £435m to fund growth investment and shareholder returns.
- Tracsis acquires a software asset with 86% revenue growth over four years (£7m to £13m) and 31% operating margins, expanding its rail-tech footprint.
The disposal crystallises a significant unrealised gain and accelerates near-term cash, supporting FirstGroup's capital allocation policy at a time when the group is balancing shareholder returns with investment in regulated transport contracts (London Overground, Sizewell C). The £4m annual profit loss is modest against the £435m three-year free cash target and the £300m annual revenue run-rate from the London Overground contract, but signals FirstGroup's shift away from software toward core transport operations.
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